ConocoPhillips abandons controversial LNG bid off Alabama coast

Published 7:00 pm, Thursday, June 8, 2006

ConocoPhillips is withdrawing its bid for a liquefied natural gas terminal off the Alabama coast that would use technology critics say could harm gulf fisheries and marine life.

Gov. Bob Riley said Friday the Houston-based company was withdrawing its application in a letter to the federal Maritime Administration.

A company spokesman did not immediately return a call for comment.

Riley had a Sunday deadline to veto or allow the application for an LNG terminal south of Dauphin Island using what is known as an "open loop" vaporization system. Riley had indicated he opposed that kind of system and would veto the application in an announcement Friday.

"We've been having conversations with them for the last few weeks," Riley said. "I was prepared to veto that. They made the decision they wanted to withdraw the application."

Riley has said he would not allow "any activity that I believe may adversely impact our marine resources if I have the power to stop it."

Environmental and conservation groups urged Riley to veto the project, as Louisiana Gov. Kathleen Blanco did last month on a McMoRan Exploration Co. application. Riley had publicly supported Blanco's veto.

Critics of the "open loop" vaporization system say it could harm marine life, particularly fish eggs and larvae, as it uses massive amounts of warm waters to reheat the gas.

The LNG industry, which defends the technology, says the proposed Compass Port terminal off Dauphin Island would be capable of vaporizing up to 1 billion cubic feet of liquefied natural gas per day. Federal officials say the system would require 136 million to 177 million gallons per day of seawater.

Environmentalists have fewer objections to a closed loop system at LNG terminals, and Riley said he believes ConocoPhillips will now consider such a system.

"I think it's going to give them an opportunity to reassess their whole LNG structure," he said.

A ConocoPhillips spokesman said Thursday the process of gaining regulatory approval for the project is lengthy and expensive and the company would have to review whether it wants to start over. The Compass Port terminal was projected to create 600 jobs.

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"I'm not saying what we're going to do. We would have to think about it," ConocoPhillips spokesman Steve Lawless said Thursday.